Individual Mandate Changes for Cancelled Insurance Plans

The Obama administration has announced that Americans whose insurance plans have been canceled this year will get a temporary exemption from the “individual mandate” section of the Affordable Care Act.

This means that if your insurance company cancelled your insurance plan in 2013, the federal government won’t require you to get health insurance in the near future. You now have more time to assess a handful of insurance options, including a short-term insurance policy from a company like HCC Medical Insurance Services.

Thursday’s major development in Washington comes on the eve of significant health care changes that are scheduled to take place in 2014. This post will describe the significance of this federal health care development and detail some of the coverage options available to those who now have a reprieve from the insurance mandate.

Significance of the hardship exemption

Under the Affordable Care Act (ACA), all Americans who meet specified income guidelines are required to buy a health insurance policy that meets minimum coverage requirements. But this individual mandate section of the ACA includes a 'hardship exemption' that is now coming into play, according to the Washington Post in an article published Dec. 19, 2013.

On Thursday, the Obama Administration agreed, along with a group of U.S. Senators led by Sen. Mark Warner, that having your insurance plan cancelled meets the requirements of “an unexpected natural or human-caused event” under the hardship exemption, the Post reports.

But how many people fall under the uncertain situation of having had their insurance plan cancelled? It’s unclear at this point, as there isn’t a truly reliable figure just yet, the Post reports.

What if my health insurance plan has been cancelled?

If your insurance plan has been cancelled, you now have more time to figure out what you’re going to do. You now have several options for health care coverage, according to Healthcare.gov.

Buy an alternative plan that your insurance company offers you.

Buy a new plan in the Health Insurance Marketplace. Some states operate their own marketplace, while the federal government runs the Marketplace in other states. Find the Marketplace in your state here.

Buy a plan outside the Marketplace. You can buy an insurance plan directly from an insurance company, with the help of an insurance agent or broker, or from an online health insurance seller.

Buy a “catastrophic insurance plan.” This is where the hardship exemption comes into play. A catastrophic plan generally requires you to pay all of your medical costs up to a certain deductible—usually several thousand dollars. These lower-premium catastrophic health insurance plans essentially protect you from worst-case scenarios involving large medical bills.